IG10003 — Economic Effects of the FY2014 Shutdown

Prepared by Marc Labonte and Bisola Momoh For more information, see CRS Report R43292, The FY2014 Government Shutdown: Economic Effects, by Marc Labonte. Sources: Federal Employees out of work in October 2013 - Bureau of Labor Statistics, http://www.bls.gov/bls/shutdown_2013_empsit_qa.pdf Measured Effects of Government Shutdown on GDP Growth - Bureau of Economic Analysis, http://www.bea.gov/newsreleases/national/gdp/2014/pdf/tech4q13_adv.pdf Comparing GDP and Federal Spending Growth in the Fourth Quarter of 2013 to other quarters -Bureau of Economic Analysis Federal Government Output declined 6.6% in 2013:Q4, but it also fell sharply in the four previous quarters, when there was no shutdown Nevertheless, GDP growth overall grew unusually rapidly in 2013:Q4 COMPARING GDP AND FEDERAL SPENDING GROWTH IN THE FOURTH QUARTER OF 2013 TO OTHER QUARTERS. -10 -8 -6 -4 -2 0 2 4 6 2012 2013 2014 2015 % CHANGE GDP FEDERAL GOVT OUTPUT MEASURED EFFECTS OF GOVERNMENT SHUTDOWN ON GDP GROWTH. The Bureau of Economic Analysis estimates that lost hours worked by federal employees reduced GDP growth by 0.3% in the fourth quarter of 2013. BEA did not attempt to measure any other effects of the shutdown on GDP, so this estimate can be thought of as a lower bound of the shutdown’s effect on GDP. 0.3% FEDERAL EMPLOYEES OUT OF WORK IN OCTOBER 2013 The Bureau of Labor Statistics counted 440,000 federal workers who reported their status as unemployed on temporary layoff or not at work (not including those who were not at work because they were sick, on vacation, etc). Most of those workers’ employment status can be attributed to the shutdown—by comparison, 15,000 federal workers were in those categories in October 2012. OCT 2012 OCT 2013 Thousands of Federal Workers temp layoff not at work (other) 0 100 200 300 400 500 ECONOMIC EFFECTS OF THE FY2014 SHUTDOWN The federal government experienced a funding gap beginning on October 1, 2013, which ended when the Continuing Appropriations Act, 2014 (P.L. 113-46) was signed into law on October 17, 2013. This funding gap resulted in a "government shutdown" and the furlough of federal employees who were not excepted. This infographic reviews the official data available on the shutdown’s effect on the economy. /

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